Texas’ Win Streak Against EEOC Provides Playbook for Red States

Texas has emerged as a litigation foe of the US Equal Employment Opportunity Commission, most recently convincing a federal judge to block the enforcement of a pregnancy bias statute against employees of the state.

Judge James Hendrix of the US District Court for the Northern District of Texas ruled Feb. 27 in Texas’ favor on the Pregnant Workers Fairness Act because he said the Congressional funding package that included it passed through the House of Representatives without a constitutional quorum.

The ruling followed a 2022 Northern District decision to vacate the EEOC’s rules allowing exceptions for LGBTQ+ employees from workplace bathroom and dress code policies and a 2018 decision in that court limiting enforcement of criminal background check guidance.

The growing trend of Texas federal litigation wins against the EEOC shows the power its lawyers hold before conservative-leaning home court judges, and how the state’s interpretation of federal agency power has found a generally friendly bench in Texas and the US Court of Appeals for the Fifth Circuit. As a Democrat-led commission continues work on new rulemaking, Texas appears likely to continue to lead red states in mounting challenges that could have nationwide effects.

“This has been an area that as a jurisdiction that has challenged a number of EEOC actions and will continue to do so as the EEOC rolls out more policies in the future,” said Andrew Maunz, an employer-side attorney at Jackson Lewis P.C. and former legal counsel to the commission.

Texas Track Record

The recent decision blocking the PWFA caps off three major court wins for Texas on its home turf against the EEOC in the past six years, all of which invoked hot button social issues.

The PWFA, enacted in late 2022, requires employers to grant reasonable accommodations for pregnant workers, similar to those required for disabled employees. While the law received bipartisan support in Congress, it later attracted criticism due to the inclusion of abortion as a pregnancy-related medical condition in EEOC rulemaking.

The judge said that Texas established an injury by showing the state’s government would bear costs for updating policies and remaining in compliance with the law, so it had standing to sue claiming the PWFA was passed unconstitutionally.

This decision follows a case filed by Texas challenging the EEOC’s guidance which strongly discouraged employers from blanket bans on hiring workers with criminal records.

The Fifth Circuit upheld an order blocking the enforcement of the guidance against Texas in 2019, finding that the agency overstepped its statutory authority in issuing it.

“Texas has a tradition and a track record of not being afraid to do this and to be a leader in this particular area,” said Gerald Maatman, an employer-side attorney at Duane Morris LLP. “It brings to mind the colloquial expression, ‘don’t mess with Texas.’”

In 2022, a federal judge in Texas ruled that the EEOC’s guidance allowing exceptions for LGBTQ+ employees from workplace policies on bathrooms, dress codes, and locker rooms was unlawful.

Judge Matthew Kacsmaryk vacated the guidance, determining that the agency misinterpreted the scope of the US Supreme Court landmark 2020 ruling in Bostock v. Clayton County, which said that federal anti-bias law prohibits job discrimination based on sexual orientation and gender identity.

The Northern District of Texas’ position as a popular forum for challenging federal rulemaking has improved with the addition of Trump-appointed judges to the bench, including Hendrix and Kacsmaryk. Hendrix was originally nominated by former President Barack Obama but was renominated by Trump in 2016.

Trump’s influence on Texas federal courts has had a strong impact through Kacsmaryk in particular, who has blocked many Biden administration policies, including on immigration and reproductive rights. Kacsmaryk has heard six of the 27 lawsuits filed by Texas against the federal government since President Joe Biden took office.

The Fifth Circuit also may be friendly to the state’s arguments against agency power. Some 12 of the 17 active judges on the bench were Republican presidential appointees, including all three that heard the criminal record guidance case against the EEOC.

“Texas has had some success challenging some EEOC guidance documents in particular, and in those cases, Texas was acting in its role as an employer,” said Michael Eastman, a management-side labor and employment attorney at NT Lakis. “In that way, it was most able to show harm and establish standing and that’s similar here. The court here found in Texas as an employer had standing to challenge the Pregnant Workers Fairness Act.”

Texas has had success in its litigation against the EEOC keeping cases in the Northern District. It overcame attempts from EEOC and other defendants in the PWFA litigation to move the litigation to courts in Washington, D.C., or Austin, two potentially friendlier districts.

The state’s case against the EEOC’s criminal record guidance was originally dismissed for lack of subject-matter jurisdiction but remanded by the Fifth Circuit back to the district court.

State’s Motivation

The motivation behind Texas’ litigation against the agency can be attributed more to the political leanings of its leadership on certain hot-button social matters, rather than specific animus against the commission, according to employment attorneys.

“I don’t think that this movement is sparked by something specifically against the EEOC, but the EEOC does deal with issues that are going to attract conservative ire,” said Leslie Silverman, a labor and employment attorney at Fortney Scott and former commission vice chair.

Texas has also at times banded together with other red states to challenge the EEOC.

In 2022, a Tennessee judge sided with 20 states, including Alabama, Kentucky, and West Virginia, and blocked EEOC’s guidance permitting exceptions for LGBTQ+ employees from workplace policies on bathrooms, dress codes, and locker rooms.

There are likely more opportunities on the horizon for Texas to mount challenges to EEOC guidance. The five-member commission now has three Democrats and two Republicans, giving the panel the first clear Democratic majority since Biden took office and allowing it to move forward with priorities that might be objectionable to red state attorneys general.

Last November, Tennessee Attorney General Jonathan Skrmetti and 19 other state AGs, including Texas Attorney General Ken Paxton, sent the EEOC a letter saying the agency’s September 2023 draft enforcement guidance on harassment violates Title VII of the 1964 Civil Rights Act because it goes beyond what the statute allows.

In the letter, the states add that if the EEOC doesn’t make changes to its guidance, which covers behaviors from assault to misgendering to preventing workers from using the bathroom that fits their gender identity, they are prepared to pursue legal action.

Eastman said that other states may not be in a rush to line up litigation against EEOC guidance following Hendrix’s PWFA decision because they may be hesitant to spend the money to bring an action challenging agency guidance when the underlying law is still the same.

“The EEOC can always take steps to enforce Title VII regardless of whether it has guidance on the books,” Eastman said.

But challenging an entire statute such as Texas did in its PWFA suit could for the time being open up new avenues for litigation from more states, at least when it comes to challenging a set of labor statutes that the House passed through proxy voting.

“The function of a federal agency, its ability or its power to pass regulatory guidance on what it thinks the statute is or how it ought to be interpreted, kind of all those things are in play, and it’s part legal, it’s part political, as this case shows,” said Maatman.